Insurers must ditch behaving ‘like factories’ and put customers first

The use of digital technology and social media platforms to build customer centricity is an important opportunity in today’s insurance industry, Candy Yuen, CEO of HSBC Insurance (Asia), told delegates at the EAIC conference.

Heading up a plenary session on customer centricity, she outlined the traditional, non-customer centric view taken by most insurance companies.

“Traditionally insurance companies have behaved more like factories: we manufacture insurance products for our sellers - insurance agents, banks and other intermediaries - to sell to the customers,” she said.

“It is product driven and there are very limited touch points with our customers. We only use basic CRM techniques or business intelligence to understand those customers. Some even believe that the agents own the customers and the insurers are simply product suppliers.”

Traditionally, customers have been placed at the end of the value chain, said Yuen. However, as the technological and social environment advances insurers are presented with huge opportunities to learn from and interact with customers.

“Now the customers are placed at the centre of everything we do,” she said. “The world has changed rapidly and the market dynamic is no longer linear. There are new platforms and systems forming new market drivers, which are all interlocking.

“We are more than just a product manufacturer – we deliver 360-degree service focusing on customer experience.”

Connection and engagement are becoming the new business principles in today’s world, with the industry moving on dramatically from the traditional channels which have been its major connection with customers, she added.

She highlighted social media platforms such as Facebook and WeChat as important channels for connecting with customers. With a 2016 study finding that on average a non-heavy smartphone user touches his smartphone 2,617 times a day, insurers cannot afford to ignore these channels.

“In Hong Kong people spend on average 1.5 hours a day on social media and some insurers have already entered this space,” she said. “Insurers of today and tomorrow are building on traditional channels with digital channels.

“The new business model will be geared to customer centricity. Predictive analytics and big data will become the cornerstone to product and service development and underwriting, delivering to the customer tailor-made products, services and user experience.”

Citing a study commissioned by her firm to find out how much engagement the insurance industry in Hong Kong had with its customers, she noted that there has been an increase in emotional communication efforts, but that many are not yet converting this into customer engagement.

“I personally see the engagement gap as a big opportunity within the industry,” she said. “We should be beginning to give more thought on investment in customer insight. Our customers should be at the centre of our products and service delivery planning. In taking a customer centric approach we aim to garner both active and passive customer advocacy, turning our customers to advocates.”